US REIT offers $570 million for Israeli Shufersal Real Estate

Shufersal spun off its properties into a wholly-owned subsidiary last year.


New IDB Holding Corp. Ltd. (TASE:IDBH) controlling shareholders Eduardo Elzstain and Moti Ben-Moshe may be on the verge of their first big deal in the Israeli capital market. Sources inform ”Globes” that they have received a NIS 2 billion (about $570 million) offer from a US REIT for the properties of IDB subsidiary Shufersal Ltd. (TASE:SAE), Israel’s largest supermarket chain. Migdal Underwriting and Business Initiatives Ltd. are brokering the deal.

Elsztain and Ben-Moshe will now decide whether to accept the offer. If they do, the REIT reportedly wants to close a deal within months.

In April 2013, Shufersal spun off its real estate business into a wholly-owned subsidiary, Shufersal Real Estate Ltd., which assumed ownership of the company’s 68 supermarkets with a value of NIS 1.7 billion, which Shufersal booked at a discounted value of NIS 1 billion. Shufersal Real Estate also assumed 16 investment properties, worth NIS 380 million, and five supermarkets under construction, worth NIS 46 million.

Most of the properties were leased back to Shufersal in twelve-year leases, with two options to extend. A few properties were leased back in five-year leases, with four options to extend. Shufersal said at the time, “The purpose of the spin-off is to focus management, develop and redevelop properties as an additional business, and create value for the company and its shareholders.”

Published by Globes [online], Israel business news – 

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